Ownership overemphasis problematic

1st February 2013

By: Zandile Mavuso

Creamer Media Senior Deputy Editor: Features


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Although the mineral regulatory regime and black economic-empowerment (BEE) policies have the empower- ment of mineworkers and communities among their aims, they have largely led to the enrichment of a well-connected few.

As a result, mineworkers and marginalised communities have generally not enjoyed the promised benefits of BEE, says Webber Wentzel head of Africa mining and energy projects Peter Leon.

“The unrest in the mining industry over low wages and poor living conditions has highlighted the long path ahead in meeting the aims behind South Africa’s BEE policies.”

BEE is supposed to be promoted through the elements of ownership, procurement and enterprise development, beneficiation, employment equity, human resource development, mining community development, housing and betterment of living conditions, sustainable development and growth, as well as reporting.

In his address at the Transformation Indaba 2012, Leon said the most significant problem with the application of BEE measures in the mining industry is the over- emphasis of the ownership element, despite the importance of the other elements.

“The original Mining Charter and the revised Mining Charter of 2010 emphasise the ownership element by requiring stake- holders to achieve 15% ownership by historically disadvantaged South Africans (HDSAs) by 2009, and 26% ownership by HDSAs by 2014.”

This emphasis of the ownership element has unfortunately not translated into meaningful benefits for mineworkers and communities. Leon points to a 2009 Department of Mineral Resources report which laments the fact that “the reported level of BEE ownership is concentrated in the hands of anchor partners and [special-purpose vehicles], representing a handful of black beneficiaries”. As the report points out, this is “contrary to the spirit and aspiration of both the Freedom Charter and the Mining Charter”.

In recognition of the deep inequality in the mining industry and the fact that ownership and control are concentrated in the hands of a minority of white South Africans, the Mining Charter was developed and adopted as a tool to foster transformation in the mining sector and to empower workers and communities.

The Mining Charter was intended to change the status quo, where the industry was divided along racial lines and HDSAs were merely considered a source of cheap labour.

In attempting to drive this change, the Mining Charter aims to give effect to the right to equality, enshrined in Section 9 of the Constitution of the Republic of South Africa, which obliges the State to put in place measures to redress historical and social inequalities.

While Leon regards the objectives BEE policies aim to advance as both legitimate and important, he believes that South Africa must change the way in which these policies are implemented. Instead of focusing on real and meaningful broad-based empowerment, BEE has been implemented in a way which principally benefits a few well-connected individuals. This focus needs to change so that mineworkers and communities participate meaningfully in and benefit from mining operations.

Edited by Megan van Wyngaardt
Creamer Media Contributing Editor Online


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